Stocks end higher as Ukraine tensions abate; Dow derails loss streak

Stocks rallied on Monday, with the Dow industrials rebounding after a five-day losing streak, as voting in Crimea passed without violence and after economic reports had U.S. manufacturing output jumping the most in six months in February.

"We've gotten used to markets that are going to price in the worst-case scenario," said Art Hogan, chief market strategist at Wunderlich Securities, of the possibility of violence or military conflict during the weekend as a referendum was held in Crimea on whether to join Russia.

"Even when things may not be pretty, so to speak, when it's expected," the market is typically satisfied, said JJ Kinahan, chief strategist at TD Ameritrade, who noted the CBOE Volatility Index (VIX), a measure of investor uncertainty, on Monday fell 12 percent to 15.70. Investors "were paying up on Friday for protection going into this weekend, just in case, which allowed them to keep their long positions."

On Monday, President Barack Obama imposed sanctions against Russian officials after voters in Crimea on Sunday endorsed separating from Ukraine to join Russia. The U.S. announcement came after the European Union announced travel bans and asset freezes on 21 people.

Economic reports had U.S. industrial output rising in February; up 0.8 percent, and better than the 0.1 percent rise anticipated by economists polled by Reuters. And, the March Empire State Factory Index climbed to 5.61 in March after a reading of 4.48 the prior month.

Stocks maintained gains after a monthly measure of home builder confidence rose a tepid 1 point to 47 in March, with the latest reading still below 50, the line between positive and negative on the survey released by the National Association of Home Builders.

"For a market that was down five days in a row last week, it looks like it's going to test a bit of a reflex rally here," said Hogan.

During the session, the blue-chip index briefly gave up about a third of its gains, with JJ Kinahan, chief strategist at TD Ameritrade, saying the descent "could have been a bit of program trading" ahead of Friday's triple witching, one of the four biggest expirations of the year, when contracts for stock-index futures, stock-index options and stock options all expire on the same day.

"As people unwind their options versus stocks, versus futures, and as program trading presents opportunities, you could see some volatility," Kinahan said.

The S&P 500 added 17.70 points, or 1 percent, to 1,858.83, with technology leading gains that included all 10 of its major industry groups.

Hertz Global Holdings rose 4.8 percent after The Financial Times cited people with knowledge of the matter in reporting the car-rental company would spin off its equipment-rentals business. Shares of General Motors added 1.6 percent after the auto manufacturer said it would incur a $300 million first-quarter charge to over costs associated with an ignition-switch problem and other recall costs.

On the New York Mercantile Exchange, crude-oil futures for April delivery dropped 81 cents, or 0.8 percent, to $98.08 a barrel; gold futures for April delivery declined $6.10, or 0.4 percent, to settle at $1,372.90 an ounce.

The dollar declined against major U.S. trading partners, while the 10-year Treasury yield gained 4 basis points to 2.699 percent.

On Friday, U.S. stocks declined, with the Nasdaq Composite posting its first weekly drop in six, as concern escalated about Ukraine, two days before the vote that had Crimea opting to join Russia.

On Tuesday, the Federal Open Market Committee starts a two-day meeting that is widely expected to have monetary policy makers continuing to taper asset purchases. The FOMC has so far trimmed monthly bond buys to $65 billion from $85 billion in December.